A weak third quarter at The New York Times isn't slowing down the company's digital ambitions.
CEO Mark Thompson told analysts in a conference call that he believes the Times can add a million, maybe even several million, digital subscribers over the next few years.
In just the third quarter, the Times showed a net increase of 116,000 subscribers to its news products and another 13,000 to its crosswords vertical. That brings paid digital-only subscriptions to nearly 1.56 million.
Thompson's comment pertained just to the United States market. There is a big additional opportunity for the Times, he said, internationally (now that distributing a paper product is no longer crucial).
The Times suffered print advertising losses (19 percent compared to the same period in 2015), comparable or even a little worse to those reported earlier by companies like Gannett and McClatchy.
But Thompson pointed out that print advertising now makes up only 22 percent of the total, "so our exposure is much less than (our) competitors."
Digital ad revenue increases and circulation revenue growth held the company's overall revenue decline to 1 percent year-to-year.
The Times is also seeing fast change in the mix of digital advertising. What it calls "legacy" formats — banners and other traditional digital display — is fading quickly. But newer forms — like smartphone ads, branded content, programmatic and now virtual reality/360 — are picking up the slack.
In the second quarter of 2016, the new forms nearly matched the revenue contribution of the old. In the third quarter they became "meaningfully larger," said Chief Revenue Officer Meredith Kopit Levien.
I noted in stories yesterday on Gannett and Tronc that they have $170 million and $187 million respectively in cash on hand and may go shopping for added scale with new properties. The New York Times closed the third quarter with $945 million in cash.
Hence it can easily afford small acquisitions like its buy last week of Wirecutter, a product rating and sales site, for roughly $30 million.
But the cash cushion mainly allows the Times to continue investing aggressively in digital expansion and promotion of circulation starts. Unlike peer companies, it reported expenses up slightly for the quarter (3.2 percent compared to the period a year ago).
It expects more of the same in the fourth quarter but also is planning newsroom cuts and realignment of positions over the coming months.
Wall Street's reaction to the mix of good and bad news was mildly positive with shares up about 2.5 percent in early afternoon trading.